Using illegal drugs is like gambling or eating junk food and there needs to be a wholesale review of the Government's approach, the independent body that analyses drug laws has said.
There are "some moderately selfish or risky behaviours that free societies accept will occur and seek to limit", the final report of the UK Drug Policy Commission (UKDPC) said.
Its six-year study found much of the £3bn the UK spends annually on tackling illicit drugs is not based on evidence and, until government pursues policies based on what works, it will continue to waste public money and damage lives.
Calling for a "wholesale review" of drugs laws and the classification system, it said possession of small amounts of drugs for personal use should be made a civil offence instead of a criminal offence.
Some 42,000 people in England and Wales are sentenced each year for the possession of drugs, with about 160,000 people given cannabis warnings, the report added.
For cannabis, there was also "an argument that amending the law relating to the growing of it, at least for personal use, might go some way to undermining the commercialisation of production", the UKDPC said.
The commission called for Parliament "to revisit the level of penalties applied to all drug offences and particularly those concerned with production and supply", but stopped short of calling for the decriminalisation or legalisation of most drugs.
"We do not believe that there is sufficient evidence at the moment to support the case for removing criminal penalties for the major production or supply offences of most drugs," it said.
A new approach was also needed because the rapid creation of new drugs was changing the market too quickly for the traditional methods used to control it.
"Seeing all drug use as invariably problematic can reduce the cost-effectiveness of policy," the commission said.
"Just like with gambling or eating junk food, there are some moderately selfish or risky behaviours that free societies accept will occur and seek to limit to the least damaging manifestations, rather than to prevent entirely.
"Taking drugs does not always cause problems, but this is rarely acknowledged by policy makers."
The report added: "We do not believe that pursuing the goal of encouraging responsible behaviour requires the prevention of all drug use in every circumstance.
- Much of the £3bn the UK spends annually on tackling illicit drugs is not based on evidence of what works
- Possession of small amounts of drugs for personal use should be made a civil offence instead of a criminal offence
- Governments have done much to reduce the damage caused by drug problems, including needle exchanges and investment in treatment for addicts
- Current programmes designed to prevent young people from using drugs through education and information, such as the Just Say No campaigns, have "little" impact
- Traditional law enforcement efforts often "have limited or no sustained impact" on drug supply
"The best policy will depend on which users and suppliers we are talking about, on what drugs they are using and supplying, and on other factors relevant to their particular case as well as the types of harm being caused, both to individuals and to society.
"There are unlikely to be any silver bullets."
Professor Colin Blakemore, the former chief executive of the Medical Research Council and a commission member, said:
"Medicine has moved past the age when we treated disease on the basis of hunches and received wisdom.
"The overwhelming consensus now is that it is unethical, inefficient and dangerous to use untested and unvalidated methods of treatment and prevention.
"It is time that policy on illicit drug use starts taking evidence seriously as well."
Dame Ruth Runciman, the UKDPC chairwoman, said UK governments have done much to reduce the damage caused by drug problems, including needle exchanges and investment in treatment for addicts.
"Those programmes are supported by evidence, but much of the rest of drug policy does not have an adequate evidence base," she said.
"We spend billions of pounds every year without being sure of what difference much of it makes."
Drugs policy needs to be changed to focus on lowering the risk of harm to users and to others, and the bar should be set particularly high for children and young people, the UKDPC report A Fresh Approach to Drugs said.
Government and society should support individuals to behave responsibly, it added.
Current programmes designed to prevent young people from using drugs through education and information, such as the Just Say No campaigns, "have generally been shown to have little or no impact - or even to increase drug use", the report said.
But "some wider programmes that address children's general behaviour and their attitudes to school and their beliefs about what is normal behaviour, may have an overall positive effect".
It also said traditional law enforcement efforts often "have limited or no sustained impact on supply" and can have unintended consequences.
"For example, where arresting one group of drug dealers leads to an increase in violence in the area as a result of a turf war between rival gangs seeking to fill the gap created."
Instead, police action should focus on particularly harmful groups or behaviours, such as using intelligence to identify and prosecute dealers who are particularly violent or who exploit children, the report added.
"Similarly, current drug laws can lead to unintended consequences, such as criminalising many otherwise law-abiding young adults, and is not always effective in encouraging people to behave responsibly."
The study comes three years after a government adviser on drugs, Professor David Nutt, was sacked after claiming that horse riding was more dangerous than taking ecstasy.
A Home Office spokeswoman said: "While the Government welcomes the UKDPC's contribution to the drugs debate we remain confident that our ambitious approach to tackling drugs - outlined in our Drugs Strategy - is the right one.
"Drug usage is at it lowest level since records began. Drug treatment completions are increasing and individuals are now significantly better placed to achieve recovery and live their lives free from drugs.
"I want to take this opportunity to thank the UKDPC for its work in this area over the past six years."